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LH Group Ltd (1978) Fair Value & Analysis

Consumer Cyclical · HK · Market cap HK$228M

LG LH Group Ltd 1978 · HK
PriceHK$0.2800
Fair ValueHK$0.1600
Upside-42.9%
Quality72/100
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Healthy Growth
Thin margins · 0.2% net margin
generates free cash flow
Mixed vs. peers (5/11)
Narrow moat 20/100
Evidence: High Range HK$0.1600 – HK$0.1600 Share as image

Fair value as of: Aug 13, 2026

From 24 valuation models · updated 4 days ago

Share price +5.7% over the past month.

A solid business, but screening 43% overvalued on our models.

What matters now

  • A high-quality business (quality 72/100), yet the market already pays well above fair value. Quality at a full price, with little margin of safety.
  • The price sits above even our optimistic bull case (HK$0.1600). The favourable scenario is already priced in.
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Price vs Fair Value (5 years)

HK$1.18 HK$0.2550 Fair Value HK$0.1600 Mar 2021 Aug 2026

White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Aug 13, 2026.

How to read this chart

60‑month range HK$0.2550 – HK$1.18 · the HK$0.2800 price screens above the HK$0.1600 fair value. Dashed = 300-day average. As of Aug 13, 2026.

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Analysis

LH Group Ltd (1978) currently trades at HK$0.2800, while our model-based Fair Value estimate is HK$0.1600, implying the stock looks roughly 42.9% overvalued today. The Quality Score stands at 72/100 (solid quality), in the Consumer Cyclical sector. Bear case: priced above our estimate, the market already discounts strong expectations. Bull case: above-average quality can justify a premium, the entry price still matters most (evidence: high).

Over the trailing twelve months, LH Group Ltd generated revenue of HK$1.1B at a net margin of 0.2%. Revenue grew 1.4% year over year. It earns a return on equity of 0.7%. Net debt stands at HK$128M. Fundamentals as of Aug 13, 2026

The share trades about 33% below its 52-week high and 8% above its 52-week low, currently below its 200-day average. For context, the median of 10 Consumer Cyclical peers we cover trades at -51% fair-value upside, at -43%, 1978 screens cheaper than that median.

Fair Value models

Each model estimates fair value its own way; the Fair Value above is the evidence-weighted blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small.

Model Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. Evidence
Highest evidence
Residual Income HK$0.1800 HK$0.1600 HK$0.1000 76
Growth DCF HK$1.51 HK$1.84 HK$2.20 72
Gordon GGM HK$0.2800 HK$0.3800 HK$0.4600 70
All 24 models by family
DCF Models
FCF DCF HK$1.49 HK$1.85 HK$2.25 38
Owner Earnings HK$1.35 HK$1.66 HK$2.02 31
5Y Revenue Exit HK$1.35 HK$1.82 HK$2.39 39
5Y EBITDA Exit HK$3.40 HK$5.38 HK$7.61 41
5Y P/E Exit HK$0.7900 HK$0.8500 HK$0.9000 38
10Y Revenue Exit HK$1.38 HK$1.77 HK$2.21 36
10Y EBITDA Exit HK$2.49 HK$3.80 HK$5.38 37
10Y P/E Exit HK$1.11 HK$1.21 HK$1.30 35
Earnings-Based
Graham-Dodd HK$0.0100 HK$0.0300 HK$0.0400 54
EPV HK$2.91 HK$3.24 HK$3.51 59
Dividend Discount
Gordon GGM HK$0.2800 HK$0.3800 HK$0.4600 70
DDM Multi-Stage HK$0.2800 HK$0.3700 HK$0.4500 61
Multiples
P/E Multiple HK$0.0400 HK$0.0500 HK$0.0600 63
P/S Multiple HK$0.0300 HK$0.0400 HK$0.0500 58
P/B Multiple HK$0.0300 HK$0.0400 HK$0.0500 55
EV/EBIT HK$5.93 HK$7.84 HK$9.76 53
EV/EBITDA HK$5.75 HK$7.61 HK$9.47 54
EV/Revenue HK$1.31 HK$1.80 HK$2.29 43
Asset-Based
NCAV (Graham) HK$0.1500 HK$0.2000 HK$0.2900 50
Growth DCF
Growth DCF HK$1.51 HK$1.84 HK$2.20 72
Rev-Margin DCF HK$1.35 HK$1.85 HK$2.38 67
Economic Profit
Residual Income HK$0.1800 HK$0.1600 HK$0.1000 76
ROIC Compounder HK$2.92 HK$3.26 HK$3.55 67
Growth Earnings
Growth-Adj P/E HK$0.0300 HK$0.0400 HK$0.0500 68

Widest divergence: Growth DCF (HK$1.84) versus Earnings-Based (HK$0.0300). Highest evidence: Residual Income (76).

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Key figures & financial health

Revenue (TTM) HK$1.1B
Revenue growth (YoY) +1.4%
Net margin 0.2%
Return on equity 0.7%
Free cash flow HK$137M FY2025
Operating margin 2.4%
More key figures
EPS growth (YoY) -42.9%
Net debt HK$128M FY2025

Figures from reported company fundamentals · as of Aug 13, 2026. TTM = trailing twelve months.

Quality Score breakdown

Overall quality 72/100

Of which business quality 74 · Market factors (momentum, volatility) 32

Profitability 49
Margins and returns on capital today
Quality Growth 71
Are margins and returns improving?
Cashflow 73
Earnings quality: real cash, not paper profit
Fin. Strength 82
Balance sheet, leverage, solvency risk
Investment 98
Disciplined investing over empire-building
Low Volatility 73
Calm price path (market factor)
Momentum 18
Price trend over the last 3–12 months (market factor)
52W Momentum 11
Distance to the 52-week high (market factor)
Net Issuance 82
Buybacks instead of dilution

Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.

About the company

LH Group Limited, an investment holding company, operates as a full-service restaurant company in Hong Kong. Its restaurants specialize in Asian, Japanese, and Cantonese cuisines.

Full company description

LH Group Limited, an investment holding company, operates as a full-service restaurant company in Hong Kong. Its restaurants specialize in Asian, Japanese, and Cantonese cuisines. The company operates various restaurants under the Mou Mou Club, Peace Cuisine, Wing Wah Allday, Pot Master, and #HAP Taiwanese Hotpot, Shabu Days, SO MEEN, and Twins Liangpi x KABU self-owned brands, as well as GyuKaku, Gyu-Kaku Buffet, Gyu-Kaku J, On-Yasai, Gyu-Kaku JinanBou, The Matcha Tokyo, and Hikiniku To Come franchised brands. It also sells food ingredients to related parties, external third ingredients, and other parties and businesses. In addition, the company engages in the property holding activities; provision of management and retail operation services; provision of procurement and logistics services; and trading of ingredients. The company has a strategic partnership with FairPrice Group Food Services Pte. Ltd. The company was incorporated in 2017 and is based in Kowloon Bay, Hong Kong. LH Group Limited operates as a subsidiary of LHG Holdings Limited.

Company description, as reported by the company or data provider.

Revenue & earnings trend

FY2021 – FY2025 · reported fiscal years

LH Group Ltd reported revenue of HK$1.1B in FY2025 versus HK$998M in FY2021, a compound +2.1%/yr. Reported net income was HK$1.7M in FY2025, compounding −62.9%/yr from FY2021.

Growth Quality 72/100
Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Latest Revenue (FY 2025)
HK$1.1B
Latest YoY
+2.4%
Avg. growth/yr (3Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.
+0.7%
Avg. growth/yr (5Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.
+6.2%
Avg. growth/yr (10Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.
+3.5%
Revenue +2.1%/yr
FY21 HK$998M
FY22 HK$1.1B
FY23 HK$1.3B
FY24 HK$1.1B
FY25 HK$1.1B
Net income −62.9%/yr
FY21 HK$90.1M
FY22 HK$77.7M
FY23 HK$88.1M
FY24 −HK$32.1M
FY25 HK$1.7M
Character of growth · EPS growth decomposed (2015-2025) +1.6 % p.a.
Revenue per share +5.4 pp

of which total revenue +5.4 pp · buybacks/dilution +0.0 pp

EBIT margin +12.8 pp
Tax rate +0.3 pp
Residual (interest, one-offs) −16.9 pp

Absolute contributions in percentage points per year; they sum to the EPS growth rate. Start and end points are 3-year averages (details on hover).

1978 screens 43% overvalued. Compare with McDonald's Corporation →

Run the numbers yourself: free valuation calculators
DCF CalculatorGraham NumberPeter Lynch FormulaDDM CalculatorFama-French ModelIntrinsic Value
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LH Group Ltd · Fair Value
HK$0.1600 −43%Fair Value
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Cite: Fair Value Calculator (2026). "LH Group Ltd Fair Value". https://www.fairvalue-calculator.com/stock/1978

Peer Group

Restaurants · 227 stocks

How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.

Quality Score 72 · Top 25%
Fair Value upside −43% · Below median
Return on equity (TTM) 1% · Below median
Return on assets 2% · Below median
Net margin (TTM) 0% · Below median
Operating margin (TTM) 2% · Below median
Revenue growth 1% · Below median
Dividend yield (TTM) 14.2% · Top 25%

Valuation Multiples vs Restaurants median · lower = cheaper

P/B 0.12× · Cheaper than 75% of peers
P/S (TTM) 0.03× · Cheaper than 75% of peers
P/FCF 0.2× · Cheaper than 75% of peers

Snowflake

Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.

VALUE 0 · sector 21
FUTURE 7 · sector 19
PAST 3 · sector 15
HEALTH 0 · sector 97
DIVIDEND 100 · sector 71

VALUE 0: the price sits above our fair-value range.

Values & ESG

Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.

None of the checked exposures detected

ESG scores are not available for this stock yet. Values and ESG data are contextual and can differ between providers.

Similar stocks

10 more Restaurants stocks, each showing price versus our Fair Value estimate (as of Aug 13, 2026).

Stock Price Fair Value vs Fair Value
McDonald's Corporation MCDS C$24.01 C$10.84 -55%
Starbucks Corporation SBUX $108.49 $35.83 -67%
Chipotle Mexican Grill, Inc CMG $32.00 $17.92 -44%
Yum! Brands, Inc YUM $150.34 $58.17 -61%
Restaurant Brands International Inc QSR C$104.50 C$36.37 -65%
Darden Restaurants, Inc DRI $218.90 $173.68 -21%
Yum China Holdings YUMC $47.90 $54.27 +13%
Texas Roadhouse, Inc TXRH $214.28 $104.89 -51%
Dutch Bros Inc BROS $51.02 $12.80 -75%
Domino's Pizza, Inc DPZ $353.72 $227.31 -36%

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Frequently asked questions

Is LH Group Ltd (1978) overvalued or undervalued?
As of Aug 13, 2026, our model estimates a fair value of HK$0.1600 versus a price of HK$0.2800, about −43% (overvalued).
What is the fair value of 1978?
Our model-based fair value for LH Group Ltd is HK$0.1600 (as of Aug 13, 2026), built from audited fundamentals. The current price is HK$0.2800.
What is the quality score of 1978?
LH Group Ltd has a Quality Score of 72/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the revenue of LH Group Ltd (1978)?
LH Group Ltd reported trailing-twelve-month revenue of about HK$1.1B (latest available figure, as of Aug 13, 2026).
What is the net profit margin of 1978?
The net profit margin of LH Group Ltd is about 0.2%, meaning it keeps roughly 0.2% of revenue as net income. Based on the latest reported figures.

How we calculate Fair Value

Each company is valued through a stack of independent intrinsic-value models (DCF variants, residual-income, multiples and more), blended into one family-balanced consensus and weighted by how much trustworthy data backs it. A separate quality layer scores the fundamentals. Every input is real reported data, nothing guessed.

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